What If The Buyer Can’t Close On Time On A Louisville Short Sale?

By
Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

Possible consequences of a buyer missing the closing deadline on a short sale:

The foreclosing lender may:

(1) raise the purchase price, or

(2) deny an extension and cancel the entire agreement with no recourse for the buyer, or

(3) delay approval of an extension by weeks or months, or

(4) push the property to get sold and lost at the foreclosure auction, or

(5) approve an extension to allow the buyer to close with no change of price or terms.

The paradox is the foreclosing lender can drag out their approval for months, but when they give an approval they want the buyer to close fast, typically within 30 days.

Is it fair? NO.

Is it reality? YES

Therefore, the buyer, the buyer's Realtor and most importantly, the buyer's loan officer must move diligently and quickly through the closing process. Once the short sale acceptance letter is received, everyone must do what they can to remove barriers and get it done.

Posted by

 

 

Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East

Website David.DavidHalpernRealtor.com

(502) 664-7827

 

 

View Dave Halpern's profile on LinkedIndave_halpern twitterhalperndave_facebookDave Halpern QR CodeLouisville Foreclosure Realtors Dave Halpern

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Rainmaker
4,432,941
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the advice . I will share this post with buyers of short sales.

Apr 25, 2011 10:57 PM #1
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Nothing new here.  It's the way of the market today.  All we can do is prepare buyer's of short sales.  First the buyer's agent needs to evaluate the "viability" of the short sale listing.  Far too many listing agents will list anything. 

 

Apr 25, 2011 11:02 PM #2
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2,071,662
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

A good post and forgotten role of the buyer agent. . to keep the deal together . .instead of just passing information to the buyer 

Apr 25, 2011 11:32 PM #3
Rainmaker
526,160
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Gita - thanks for spreading the word.

Lenn -Right. Buyers need to be oriented to back end urgency of closing. And the buyer's agent definitely needs to vet the short sale listing and the listing agent. Great points for spin off blog posts.

Fernando - Too often the buyers, their agent and the loan officers take the approach of "the lender took months to approve so we can take our time closing." As you know, it doesn't work that way.

Apr 25, 2011 11:43 PM #4
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Dave.  The matter of a buyer's agent "vetting" a Short Sale listing is one that I practice daily.  Before previewing short sales, I speak with the listing agent to find out how "viable" the home is, the lender, the agent, etc. 

Saves a lot of time and angst.

Apr 26, 2011 12:07 AM #5
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Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Dave some people (agents included) don't just take timelines seriously. It makes you think that they think it's some kind of game and then they wonder why they've lost out on a month's long process of trying to purchase the house.

Apr 26, 2011 01:51 AM #6
Rainmaker
1,411,627
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Dave, educating buyers to expect the unexpected will make life much easier.

Apr 26, 2011 02:06 AM #7
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Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

That's just the way it works unfortunately. I love your concrete explanations!

Apr 26, 2011 02:31 AM #8
Rainmaker
733,453
Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

I agree that the situation may never be fair but it's the reality that you are faced with.  It's never easy, but I agree that all of the parties involved have to be ready to close on the property once the bank gives the green light. 

Apr 26, 2011 03:17 AM #9
Rainer
211,341
Jack O'Neal
HomeSmart Elite Group - Gilbert, AZ

Not good, what do you tell the seller, bee there

Apr 26, 2011 04:01 AM #10
Rainmaker
1,619,205
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Boy we have alot of princesses on AR today. Hey, folks it's reality.  It isn't fair & we have to educate the public (buyers & sellers) as to what to expect which is everything!  I had a short last year where the loan officer said they needed 5 weeks to close - I told him we need another loan officer that needs to feed their family then!  We'll get another one that can do it.  When the bank finally decides, you have to move fast with your game plan.  You're supposed to be the 'coach' in the tranaction, not the whiner.

Apr 26, 2011 06:37 AM #11
Rainmaker
512,159
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

You are correct. Very unfair but very true. Hopefully one day this will change.

Apr 26, 2011 07:52 AM #12
Rainmaker
1,082,280
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

It's just the way it is. Deal with it or lose the house. I agree with Lyn. Find a lender who can close the deal with the timeline you have been given. Simple.

Sharon

Apr 26, 2011 02:15 PM #13
Rainmaker
144,909
Markita Woods NMLS#196099
Fairway Independent Mortgage - Woodbridge, VA
Queen of Mortgages - FHA, VA, Conventional, USDA

Timely post as I have been grappling over how much of the loan should be processed prior to short sale approval, I feel my on short sale post coming soon!

Apr 26, 2011 04:01 PM #14
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Dave - This pretty much covers all the possible basis and is so true.  It's so important we get them closed on time.

Apr 26, 2011 04:15 PM #15
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Agents often think it's no big deal to get a time extension. It is a big deal, and it could mean no deal. Your post should be read by every agent representing a buyer in a short sale.

Apr 27, 2011 07:43 PM #16
Rainmaker
90,505
Goran Utvic
606 Homes LLC | Chicagoland Brokers Inc, Chicago IL 60656 - Chicago, IL
We Buy & Sell Chicago Houses Fast

It is also very helpful to have an attorney that is experienced with the short sale process.

Apr 28, 2011 06:22 AM #17
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Rainmaker
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Dave Halpern

Louisville Short Sale Expert
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